Just ahead of the upcoming National Association of Convenience Stores (NACS) show, Wells Fargo Securities has released the results of a survey on C-store beverage trends during the third quarter of 2013. The investment bank’s “Beverage Buzz” survey, which was conducted using responses from retailers representing over 15,000 C-store locations across the U.S., found that year over year sales of non-alcoholic beverages rose by 2.6 percent in the quarter, the strongest performance so far this year, according to Wells Fargo. The growth was led by double-gains in energy drink sales, which offset declines among CSD products.

As in other retail channels, CSDs continue to move a sluggish pace in C-stores. In response, beverage manufacturers have employed “Everything Must Go” pricing promotions to counteract weak volumes. The strategy appears to have led to slightly improved CSD sales: Coca-Cola Co. products were up 1.2 percent in year over year sales in the third quarter, while sales of PepsiCo beverage rose by 1.1 percent, and Dr Pepper Snapple (DPS) sales increased by 1 percent. Nevertheless, Wells Fargo expressed concern “about the extent to which [Coke] is “buying” volume, and believes that Pepsi will continue to be “’out-promoted’ by its peers.” As for DPS, Wells Fargo views the company’s much heralded ten-calorie platform as one that will remain in decline.

“If our c-store retailer contacts are correct in their assessment of [DPS’s] TEN’s performance, we are simply hopeful that management doesn’t continue to ‘throw good money after bad’ and re-considers its $30M planned investment in the platform,” Wells Fargo said.

While survey respondents pointed to bad weather as having the largest negative impact on overall C-store beverage sales, it was negative media coverage about energy drinks that have most directly affected that category, albeit less than in recent months. Led by double-digit gains by Monster Energy, energy drinks grew by 11 percent in the third quarter, and retailers said that they are pleased and encouraged by innovation and promotions coming from the energy segment. Rising sales in energy, as well as higher margins in comparison to CSDs has translated to more shelf space for the products and less for colas, which, were down 3 percent, the largest decline in over a year.

For the fourth quarter of 2013, C-store retailers expect to price increases to remain low, while they view consumers as willing to pay 10 percent more for 20 oz. PET bottles, which currently sits at an average price of $1.62. Based on results from the survey, retailers see $1.82 as a realistic price point for 20 oz. packages. And as the market for diet sodas plummets, survey respondents believe that consumers will continue to switch to bottled water (both sparkling and still) and energy products.